June 24, 2012 | Read Time: 2 minutes
The first sign of trouble for Youth Speaks came when foundation grants grew harder to win as grant makers changed priorities, says James Kass, founder of the San Francisco group, which brings poetry and spoken-word performances into schools.
Meanwhile, costs such as health care for staff members kept increasing. Demand for the group’s services soared, especially after Youth Speaks was featured in an HBO series in 2008 that captured a poetry competition for teenagers.
As new donors began to appear, “we may have had a false sense of security,” Mr. Kass says. By 2010, the group aggressively budgeted for growth, but an increase in revenue didn’t materialize. “We didn’t have our eyes open,” he says.
During the worst part of the recession, in 2008 and 2009, revenue was flat. Then in 2010, Youth Speaks had a $250,000 deficit, after some foundations cut their grants and arts-education contracts with schools and theaters ebbed. Youth Speaks also lost $75,000 in corporate sponsorships that year. The charity’s budget shrank by $350,000 in 2011, from $2-million before the recession. It cut two staff positions and reduced the number of teaching artists it sent to schools from 40 to 10.
Its darkest moment came when the charity had a $250,000 grant lined up from a major bank’s foundation to expand the group’s educational programs across the country to coincide with the HBO show. In October 2008, two weeks before it was time to close on the agreement, the banking crisis hit and the deal fell apart.
To right its ship, Youth Speaks sought money from individuals to get away from its heavy reliance on foundation grants and school contracts. It taught 25 high-school teachers in the Bay Area—the program’s biggest cheerleaders—how to raise money online and also matched them with local arts donors. The teachers managed to raise enough money to keep Youth Speaks programs in their schools.
At the moment, the charity is starting a $1-million capital campaign and expects to raise $250,000 more than its budget this year. Board members are now trying to raise $150,000 online to meet a donor’s matching grant. The group has also increased the number of individuals who support it, from 387,000 to almost 600,000.
Looking ahead, Mr. Kass hopes to get the board more engaged in raising money. “We don’t pretend we’re out of the woods yet,” he says. “We still have some work to do, but we are trending much better.”
Recovery Tips
- Don’t cut quality programs, which will only alienate donors.
- Prepare a backup plan to meet the next crisis.
